Business Directories

Dr Al Dhahrani receiving a copy of the National Audit Court report from Mr Al Jalahma

Audit finds irregularities in key Bahrain firms

Manama, November 1, 2012

A National Audit Court (NAC) report for Bahrain for 2011-12 has highlighted serious financial and administrative irregularities in ministries, government bodies and state-owned establishments.

The report - a copy of which was presented yesterday to parliament chairman Dr Khalifa Al Dhahrani by NAC president Hassan Al Jalahma - also raised issues regarding a few key firms such as Bapco and Alba, according to a report in the Gulf Daily News, our sister newspaper.

A major issue raised was Bapco's failure to disclose its financial dealings, which made it difficult to assess if the firm was making profits or losses.

The report pointed out that Bapco incurred huge losses owing to various reasons. The firm delayed the collection of dues from the Electricity and Water Authority, to which it had sold natural gas worth BD71 million ($187.2 million).

Rampant irregularities in the company and "unlimited power" for the firm's chief executive officer were blamed for fuel sales, amounting to $179 million, for Gulf Air. Bapco did not maintain relevant documents and records to support these sales transactions, it said.

The court further observed that the company also suffered losses as it failed to deliver goods to a few clients, some of whom refused to bear the losses of $2 million out of $3 million.

It further listed a number of establishments that did not issue proper audited reports.

The court said Alba incurred losses of $3.2m as it sold products at a lower rate than the market values. The company's monitoring system was found to be weak and it did not maintain copies of sales contracts.

The court said the Ministry of Municipalities and Urban Planning Affairs and five municipalities had implemented projects without conducting proper feasibility studies or specifying objectives. It pointed out that some councillors were even granted car allowances and provided with private cars.

The sewage system came under NAC scanner and it was found that the municipality violated laws when it came to floating tenders. A few German contractors were favoured over others, the report added.

The court also found that Bahrain Airport Company had granted discounts and exemptions to 31 airline companies - of which 14 were fully exempted from landing and transit fees. The company was also found to have not maintained the necessary documents in this regard.

The audit report found irregularities in the Bahrain Internet Exchange board with regard to employment, wages and even promotions.

Similarly, a board member of the Bahrain Institute of Public Administration (BIPA) was found to have been rewarded BD13,000, without Cabinet consent.

The report said the BIPA general manager was granted special allowances for using telephone and health club - without relevant documents or prior approval.

Moreover, non-Bahraini employees at BIPA received BD350 per day while no record of their attendance was maintained, the court observed.

The appointment of director to the Bahrain Poultry Company's board was cited as illegal by the report, which also pointed out that the company's production was limited to eggs.

Irregularities continued in Bahrain Polytechnic, which witnessed expenditures of "a personal nature."